Non-Written Back Amounts: Section 41(1) Inapplicable, Clarifies ITAT

Raunika Fashion Pvt. Ltd. Vs ITO (ITAT Delhi) The case of Raunika Fashion Pvt. Ltd. Vs ITO (ITAT Delhi) revolves around the issue of whether Section 41(1) can be applied when the assessee has not written back certain trading liabilities in their books of accounts. The assessee contends that the liabilities are still subsisting and therefore, Section 41(1) is inapplicable. Analysis: The assessee argues that despite the Assessing Officer’s observation that the creditors could not be traced, it is incorrect for the Revenue to conclude that the liabilities shown in the balance sheet are non-...